Capital Budget Analysis

Essay specific features

 

Issue:

Business

 

Written by:

Paul M

 

Date added:

November 11, 2015

 

Level:

University

 

Grade:

A

 

No of pages / words:

4 / 892

 

Was viewed:

708 times

 

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Essay content:

The considerations for acceptance or rejection of a project or slate of projects are the net present value, internal rate of return, hurdle rate, and profitability index. Net Present Value The first consideration is a net present value evaluation for the project. This calculation evaluates a future stream of benefits and expenses by converting them to present values...
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A discount rate is used to discounted future benefits and the total sum of discounted costs is subtracted form the benefits. The relevant formula for NPV is: Where t - the time of the cash flow n - the total time of the project r - the discount rate Ct - the net cash flow (the amount of cash) at that point in time...
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